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Wednesday, July 27, 2011

Google+ adds $45 billion to Net giant's market value

USA Todayby Scott MartinJuly 26, 2011

The launch and hyper growth of Google's ambitious Google+ social site has helped fuel a meteoric rise in the company's stock.

Thursday marks one month since the search king unveiled its Google+ to grab attention and advertising dollars away from Facebook. Google+ is the search company's foray into social networking that numbers more than 10 million members since launch.

In that time, Google stock (GOOG) is up nearly 30%, boosting the company's valuation by $45 billion to a market capitalization of roughly $200 billion.

"Google+ has had a lot to do with the perceptions," says Scott Kessler, equity analyst at Standard & Poor's Equity Research. "People look at Google as being … a pretty important player in social media."

Put into perspective, the valuation gain is more than half the estimated value of privately traded Facebook. The social-networking giant holds an $84.7 billion valuation on the private stock-trading network Sharespost.com. And Facebook launched more than seven years ago.

Google's one-month valuation jump is more than five times Twitter's estimated $8 billion value and more than double Groupon's $18.1 billion, according to Sharespost.com. Twitter hasn't filed to go public.

Google stock traded at $482.80 on June 27, the day before Google+ launched, and closed at $622.52 Tuesday. Google shares touched a 52-week high of $642.96 earlier in the year.

To be sure, Google's blockbuster second-quarter profit gains of 36%, reported July 14, didn't hurt in nudging up the stock. But Google opened the earnings call trumpeting whopping adoption numbers for Google+ and focused praise on the product's mojo companywide. CEO Larry Page used the call to tout Goggle+'s 10 million users, grabbed in just two weeks.

Still, it remains to be seen how well Google+ fares once the honeymoon is over. Google has already taken some lumps over its axing of business users. Google responded by saying it plans a launch for businesses later this year.

Early reviews of Google+ are mostly favorable. Many say Google's concept of letting people group those they interact with into different social circles is a key differentiator from Facebook.

"This is a nice, clean service that's really working well," says IDC analyst Karsten Weide. "Whether it's a win or not remains to be seen. Those user numbers look good."